RECENTLY, FEDERAL RESERVE Chairman Jerome Powell suggested he expects the Federal Reserve to continue gradually raising interest rates if the U.S. economic expansion remains strong. The Federal Reserve has a target 2 percent rate for inflation. At this time the economy is growing at close to that rate, and customarily that means the Federal Reserve will vote to increase interest rates. Why would it mess with a good economy? Many people ask that same question — President Trump is one of them. Chairman Powell’s stated goal is to strike a balance, maximizing employment and keeping price increases stable. So what is the big deal if interest rates are increased?
When workforce wages rise, these costs are frequently passed on to the customers via a higher sales price. This increased pricing then can create inflation, creating a need to increase interest rates, which could cause a recession. In a recession, not as many tax dollars are collected, and that negatively impacts the government’s budget.
Interest rates come into play in a business setting when an entity wants to borrow money to help it in one of a variety of ways. It could borrow money because it is a seasonal business, it may want to purchase new equipment for its operations, or it may even want to purchase a business. When interest rates are increased, it reduces the amount of borrowing a business does. This frequently has the effect of slowing the economy, as businesses tend to become a bit more conservative and become spectators as they assess their future.
Increased interest rates not only impact the growth of businesses but also make them a little less profitable as their expenses increase as they pay more interest dollars on their loans due to a higher interest rate. Increased interest rates also impact employment, and generally it is a negative impact. If businesses aren’t borrowing money to grow their businesses or to purchase new equipment, odds are they are not hiring more employees and, potentially, are reducing their workforce.
So while you may not pay much attention to “something that does not impact you,” interest rate changes truly impact everyone in one form or another. Our Federal Reserve team really has a lot to consider when deciding on interest rate changes, both up and down. They study a significant amount of data to arrive at their conclusion, knowing they have to think about our entire economy. That little old interest rate really is darn important and merits our attention. It is a harbinger of things to come.
TAP Air Portugal is adding 15 new weekly flights from the United States and Canada by summer 2020, a new record for the carrier of 71 weekly flights between North America and Portugal.
As harmful to the environment as air travel is, some airports are taking measures to become more environmentally conscious. One example is Chattanooga Metropolitan Airport in Chattanooga, Tennessee, where an adjacent solar farm powers certain airport operations.
Welcome to Rhodes, a medieval treasure beautifully preserved throughout the centuries. Rhodes is the capital of the Dodecanese, an island ideal not only for those who want to relax, but also for those looking for an action-packed holiday! With its bright green hills, rich green valleys and uninterrupted line of golden beaches, Rhodes is truly a blessed place. “The sun island” has more sunshiny days and milder temperatures throughout the year than any other location in Greece. It is, after all, one of the country’s easternmost places and among the first to welcome summer on its impressive beaches. Add in the excellent facilities for tourism, the island’s special blend of cosmopolitan and traditional, and numerous cultural and archaeological sites, the most important being the Medieval (Old) Town, a UNESCO World Heritage site, and you’ve got the perfect holiday destination. While on Rhodes, don’t miss a daytrip to nearby Sými. An island of sponge divers and seamen, Sými used to have 30,000 inhabitants before the Second World War and was the richest island in the Dodecanese, despite its small size. Today, Sými attracts many visitors thanks to its beautifully preserved Neo-Classical buildings and the famous Archangel Michael monastery at Panormitis.
United Airlines announces a number of new routes.